Debt and Unemployment

These are perhaps the two biggest problems with the American economy right now. Were the American people not in debt and/or living with unemployment, I think the wealth disparity could be stomached a lot more easily. As for the Occupy Wall St. protests, the problem is that they eventually have to focus this incredible energy and dissatisfaction towards specific goals. I suggest they focus on these two goals, easing debt and creating jobs.

My suggestion for easing debt is simple and straightforward: forgive our debt. The US government, under both Bush and Obama, have used taxpayer money to bail out Wall St. This was a huge redistribution of wealth UPWARDS. I think Wall st. has benefitted enough, and now it is the people's turn to see the fruits of our "investment". You want to help homeowners? Forgive their debt. You want to help the unemployed? Forgive their debt. You want to help minorities, or the poor, or the sick? Forgive their debt. I am fully behind a re-redistribution of wealth which will benefit the 99% and would lead to more job creation and a stronger overall economy just by itself.

The other issue, employment, still needs to be addressed however. We are unable to compete globally in manufacturing when those jobs can be done for 40 cents an hour in China and elsewhere. Without manufacturing jobs, we are left only with a service industry which by itself creates less full-time jobs, pensions, health insurance... the whole gambit. We need to invest in our country and in its people, and this requires government spending, which is politically virtually impossible when we have been dug into such a hole of debt. There are jobs out there for scientists, but we can't all get them, and for many of us it is too late to learn, and we are still not investing enough in science for those of us for whom it is not too late, i.e. our children.

So my two questions are (and feel free to comment on anything you read here), do you agree or disagree with the idea of debt forgiveness, and what ideas do you have for solving the unemployment problem? Or do you just think we are royally screwed as a country and there are no feasible solutions?

Replies to This Discussion

Who disagrees with that? There will be charges against some of them. That wheel grinds slowly. Would you prefer guillotines (joking)?

Going after individuals who profiteered on the 2008 collapse is different from going after banks. Banks have shareholders and depositors - you and me. They are Limited Liability entities, a legal arrangement that shield the guys you are really mad at from correction.

The mischief of this situation is that we can't punish anybody without hurting ourselves worse. Even a wave of class action and shareholder lawsuits would not get through to the real vandals. We'd just be taking money from each other to pay lawyers.

Because we let them keep their multi-million dollar bonuses! If the mob was found to be running an illegal racketeering ring there would be cops and feds swarming all over them making mass arrests. Where is that? Huh? The authorities are just sitting on their asses letting the crooks get away.

The mob is illegal. The Wall Street guys were not breaking any laws. Our system does not let people say, "You are too rich. You must have done something wrong. Pay up." The Enron guys did specific illegal things. But the Wall Street guys didn't, in part because their racket was so new there was no law _about_ it, much less _against_ it. A few will probably be nailed eventually for insider trading or diversion of depositor money to prostitutes. But the same deregulation that set things up for these guys to prosper also set them up to cheat, and nothing will happen to most of them.

There may be room for class action and/or shareholder lawsuits. Maybe you should look into that. Seems we would have heard by now if that was going to happen.

I have heard some pretty good arguments against the idea of debt forgiveness, so to anyone out there who thinks that I am not a reasonable person (I'm looking at you John ;-) ) I think that it might not be such a good idea after all. I am not throwing the idea out completely however, the idea of reducing mortgages to their fair market value, in combination with other, more targeted approaches, is still well worth looking at. Blindly cancelling all debts however may do more harm than good (I am not convinced of either).

What is important to note is that while we are almost all in complete agreement that a few very rich people acted in such a grossly negligent way that they shot our economy to shit, stole from the American people, and weakened our country immeasurably, there are precious few suggestions for how to remedy this situation. It seems like the only solutions being offered at all, whether they are good or bad, are coming from the left, OWS or not. The right is clearly responsible and complicit in the largest redistribution of wealth upwards in history, as they have had a hand in deregulation and in advantaging the rich over the poor at every single turn. This discussion was essentially an exercise for me to understand the problems better, I wouldn't get behind an idea if I wasn't convinced of its efficacy, but I have heard few alternatives. It seems to me that those on the right would have us just take it up the ass from the 1% and then thank them and go on our merry way. If you are one of those who are shooting down every possible avenue of approach to these deep, systemic problems of socio-political organization, and are offering no solutions yourself, then I submit you may be enabling the guilty and doing no good for the innocent, i.e. you are doing more harm than good.

Dearest John, apparently you have not been listening to me. Go to www.getmoneyout.com and sign the petition for a constitutional amendment ending the auction of our democracy. I've been talking about this for weeks. We already have 235,000 signatures (only 100,000 were needed), and we are trying to make campaigns for public office free from large political donations from private interests. Get off your ass and be a part of the solution!

On Bill Clinton - duly noted. Both political parties have had their share of the guilt, and both parties are being bought by Wall St. Obama's single greatest campaign contributor was Goldman Sachs. The whole government is corrupt, and I for one am not about to sit around and do nothing while people with more money than me get to dictate the terms of my existence.

"Wall street guys were not breaking any laws" Incorrect. They were breaking numerous laws including, but not limited to: (1) Conspiracy (18 USC 371) in that they knowingly sold bad securities to government-sponsored Fannie Mae and Freddie (2) Insider trading (betting against assets they sold and knew were junk), (3) Racketeering, (4) Treason (many of these companies have secret subsidiaries in enemy countries such as Iran [see Koch industries]), (5) Bribery (bribing regulators), (6) Perjury (for lying under oath to Congress)

Now, if you would, which laws are the occupy protesters violating, since I'm pretty sure the right to peaceful assembly is somewhere in that pesky document called the Bill of Rights.

I think if you look up the definitions of those charges, they don't apply. Even the "bad securities" talk is based on a couple of informal emails. At best you would get those one or two guys who sent those messages. The companies never admitted a policy of selling bad securities, so no big fish will ever be convicted. I think Bribery of regulators might stick, from some things that have come out this year.

Look, don't be mad at me, I wish those guys would all jump out their windows. But they haven't broken any laws. Go protesters!

I know the definitions very well, actually. Does a criminal need to admit to wrongdoing to be prosecuted? Informal, internal e-mails are all it takes if those e-mails show that management knew or should have known of a common practice of peddling bad securities. This is further evidenced by the fact that Goldman hedged against the very securities they sold. It all seems very clear, even just from reading the news. Imagine what an actual police investigation from forensic accountants would turn up!

These laws have been broken. The only problem is that there is a different set of rules for the rich and powerful, so these guys will never be prosecuted.

Andrew, first of all, you should know at this point that I am inclined to agree with Josh on this one, it seems that those Wall St. guys have done things that were illegal, and certainly were immoral, and I don't know where you get off calling the protests a "mob" (echoing Eric Cantor) and saying that their right to peacefully assemble is illegal. We are clearly coming from opposing perspectives on the whole issue.

Regardless, since you do seem to agree that what the Wall St. guys did was immoral and hurt our country, and you "wish those guys would all jump out their windows", but it is clear that most of them will not, what do you suggest? I'm asking you from a realpolitik perspective, what should be done, and what can be done realistically, according to your own understanding of politics? Does your viewpoint essentially add up to, "well, we really can't do much of anything, so we should just get accustomed to the fact that we are screwed and that's the end of it"?